Net metering is one of the main reasons residential solar works financially in states like Maryland.

Under net metering, when a solar system produces more electricity than the home is using at that moment, the excess energy flows back to the grid and the homeowner receives a credit on their utility bill. In Maryland, those credits are typically applied at the full retail rate or close to it. When the home draws electricity from the grid at night or during cloudy periods, those credits offset the cost.

Credits roll over month to month, which smooths out seasonal differences between summer overproduction and winter usage. This structure allows homeowners to size systems to meet their annual usage rather than just their instantaneous demand.

Put simply:

During sunny hours, your solar panels may produce more electricity than your home is using. Instead of losing that extra power, it goes back to the grid and you receive credits on your utility bill. Those credits roll over and can be used later, like at night or during cloudy days when your system is not producing as much.

Or:

• Produce extra during the day → bank the credits
• Use electricity at night → spend the credits

If you made 20 kWh of electricity during the day and then used 20 kWh that night, your net utility bill for the day would be 0 kWh or $0 to your utility company.

Why Net Metering Impacts Solar Adoption

Historically, states that implemented strong net metering policies saw rapid growth in residential solar adoption. When customers know that excess generation will be credited at a predictable and meaningful rate, the economics become stable and financeable. Banks and lenders are more comfortable underwriting systems, and homeowners can clearly model long-term savings.

In contrast, when states reduce compensation for exported solar or move away from traditional net metering, adoption often slows. If exported power is credited at a significantly lower rate than the retail price, homeowners either need to install battery storage to capture excess generation or accept lower financial returns. That increases system costs and lengthens payback periods.

In simple terms, net metering allows solar to function like a financial hedge against rising electricity prices. Without it, homeowners are selling power cheaply during the day and buying it back at a higher rate at night, which weakens the value proposition.

Because of this dynamic, net metering has been a central driver of distributed solar growth in Maryland and across the country. Changes to net metering rules can materially change system economics, which is why it remains one of the most closely watched energy policies in any state considering the future of rooftop solar.

The Maryland Cares program (formerly the Solar for All program) is designed to expand access to solar energy specifically for low-income and historically underserved communities.

Key components:

• Incentives or subsidies to reduce the upfront cost of solar
• Programs that allow customers to benefit from solar without owning a system
• Utility-level mechanisms that compensate participants for solar value

Maryland Cares operates in parallel with other state and federal incentives to ensure that solar adoption is not solely a function of capital availability.

For Maryland homeowners evaluating solar, Maryland Cares is important because it represents an alternative pathway that may significantly improve economics for eligible participants.

An SREC is essentially a bonus you earn for producing clean electricity.

The state of Maryland requires utilities to source a certain percentage of their power from solar under the Renewable Portfolio Standard. Instead of building all that solar themselves, utilities can purchase Solar Renewable Energy Credits from homeowners and solar farms that are already producing clean power.

When your system generates electricity, it is not just lowering your utility bill. It is also creating environmental credits that utilities need in order to comply with state law. Those credits have real market value.

In simple terms:

• Your solar system lowers your electric bill
• Your system also produces SRECs
• Utilities buy those SRECs
• You get paid for them

That additional revenue improves the overall return on your system.

A Simple Example

Let’s say a homeowner installs a system that produces 10 megawatt-hours per year.

That means the system generates 10 SRECs annually.

If SRECs are trading at $50 per credit, that is:

10 credits × $50 = $500 per year

That $500 can:

• Offset loan payments
• Improve monthly cash flow
• Shorten the system payback period
• Increase total lifetime return

In a financed scenario, that additional revenue can be the difference between a system that slightly increases monthly costs and one that is cash-flow positive from year one.

In a cash purchase scenario, it directly lowers the effective net cost of the system over time.

Maryland’s “Brighter Tomorrow” SREC Upgrade

Maryland recently (end of 2024, shortly after Governor Moore was elected) updated its solar incentive policy with legislation designed to make rooftop and small commercial solar even more attractive to homeowners and developers. A major part of that update is a boost to SREC value for new systems.

Under this update, eligible new solar systems installed in Maryland between mid-2024 and early 2028 can earn “Certified SRECs,” which are worth more than standard SRECs. Rather than counting each megawatt-hour of solar production as one SREC, these Certified SRECs count as 1.5 SRECs for the same output — effectively increasing what utilities will pay for them.

Because utilities buy SRECs to meet the state’s renewable energy requirements, a higher multiplier means:

• Homeowners can earn more money per megawatt-hour of solar they produce
• The income from SREC sales becomes more valuable and more predictable
• The financial case for going solar improves even further than it already did under the original SREC program

For example, early market trades showed that these higher-value credits were selling at a noticeable premium (about ~50% higher) compared with standard SRECs — meaning a homeowner with an eligible system could see materially higher annual revenue from SREC sales.

This change is intended to accelerate solar adoption by making the financial returns of new solar systems stronger. For homeowners, it means solar can pay for itself faster, improve cash flow sooner, and help you earn more from your panels over the first 15 years after installation.